Collateral Assignment

Pledging a life policy as security for a loan. If you die with the loan unpaid, the lender is repaid from the death benefit first, and the rest goes to your beneficiary.

This is a friendly general explanation, not legal or policy language. Exact coverage depends on your policy, carrier, and state. 🤝

Written and reviewed by the We Insure Things team — licensed independent insurance agents. Last reviewed July 23, 2026. Questions? Ask a licensed agent.